Money is power – MindArk business model based on (lack of) trust.

Yeah, it was def all new to me, so it was an interesting read
 
I dont understand this post (obviously i understand it) but dont understand the point. Its known and stated facts compiled together and worded in a bias'ed/negative manner. Perhaps some more information about yourself and your motives would help. :) Trying to cause a bank rush type scenario is in no ones interest except potential compeititors or salty explayers with no skin in the game. Most people perhaps dont know how real word banks work, and it does them no good to learn, only makes them worry and panic when there's no need too. The information is out there if they wish to seek it.
 
Another thing I find particularly problematic is the fact that the OP is suggesting that the game's viability is based on player trust, then proceeds to undermine that trust by writing a somewhat alarmist, negatively biased article, as if purposefully trying to cause a 'run on the banks'.

Again, who is the OP and why is he doing this? We need more information. Is he a competitor to MA? A grumpy player MA banned? Who knows.
 
Well, from his first big article post, he seems to be a new player posting his experiences in game thus far -- but who knows i guess?

I still plan on enjoying my time killing berycled's tonight lol
 
Well, from his first big article post, he seems to be a new player posting his experiences in game thus far -- but who knows i guess?

I still plan on enjoying my time killing berycled's tonight lol

Well, my conclusion would be the opposite.
 
As one more note:

2017 was the year that MA switched from Loot 1.0 to Loot 2.0. So I'm not surprised revenues decreased that year, as there were many disgruntled players. But MA didn't do this because they wanted to keep the immediate players happy, they did this for the long term survival of the game.

But, as OP would know if they followed the returns on CLDs, player cycle is up in 2018, reflected by CLD returns. But OP doesn't seem to include any projected performance for 2018.

https://www.planetcalypsoforum.com/forums/showthread.php?219981-Calypso-Land-Deed-ROI-tracker

So OP doesn't really know and write the whole story, either because OP doesn't know about it or ignores it...

MA has also been more responsive to player brought up issues with balancing and in game mechanics.

A better article would take a balanced approach, looking at both the positives and negatives of 2018.

EU is far from a perfect game, but I have faith that MA will improve and continue to build on it. I also know the community also wants it to survive, and have a very large stake and personal investment in it. Not too many games can say that.
 
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A well written article I will say. However a few things stated as facts seem out of place, most importantly

Unfair Comparing EU to a Bank - Which Bank IRL only says that your last 6 months of deposit are covered? There are plenty other facts which very much make EU completely different then a bank and personally i think this is an unwarranted comparison.

Besides that, I had somehow forgotten about the Compet being considered as an asset ( thanks for reminding) and this is an issue which will unfold in following financial report.

As others have stated, I would also like some pertinent information about the OP as from what i have read from the article ( i even went back to the original one) while most of the information seems to the point, you do seem to hand pick them to create a narrative with a negative bias. Not being accusatory, just trying to understand the background better.

Overall however, a well written report.
 
So the OP is telling us he is a new player - ok
Then this post - ok
I combine the two and its a huge discrepance at least in my eyes.When most new players 'eat dirt" and hunt kerbs for 7 years without progress we get this elaborate lets say writing.
I do appreciate your time for post this.
The body language you use does not convince me you have positive intentions.
gl
 
Well things have moved on. This FEN event and MM has been a great success I think, and for FEN items that are ‘priced right’ players have deposited to buy them and tier them….and most importantly use them. Based upon what I’ve seen, activity on Caly has been pretty upbeat.

Sometimes I get a little frustrated at items being unrealistically priced, but it will settles down in the end. I just wish some people would recognise the market and dynamics have changed. It’s not 2006 anymore for pricing stuff.

Anyway pull out your credit card and go shoot some stuff. I’m not saying it’s all roses, personally I think the Compet situation and Ark Moon is pretty sad, but I’ve got a spring in my step at the moment…..feeling positive for 2019.

Rick
 
Thank you for a beautifully written post.


- EU definitely have similarities to a bank, but it's so very different.

- Successful & Failed projects are part of what's needed in a company's long term evolution. As long as they are learning and growing from them. This iterative process is what keeps businesses on the leading edge.

- Loot 2.0 is simpler to understand and most importantly, more fair. It's definitely the right way to go. Profits went down in that year for this shift, but it's a good move long term. Things shouldn't always be looked at from a purely accountant-type perspective.

- If most people were to withdraw from EU all at once, of course that would cause problems. This is a problem to any modern bank if it happens to them too. There's a term for it: "run on the bank". We bank on that not happening :D. ...
 
I agree on other's that the points highlighted by the OP seems biased and no other points that might tell a more positive story are taken in consideration. What is the purpose of this threat, what does the OP want to achieve?

EU is no bank, but it's also different from normal game developers. The involvement of players in EU is on a total other level compared to "normal" game developers. There have always been negative words around this game, but they still are going.

I think they made some great steps in the right direction;
  • Loot 2.0
  • Armatrix series (that helps get the economy going again, certain things have markup again)
  • Let go of side projects like Compet and Crypto

There is a lot that need to be done still, but in my opinion this game is going in the right direction and Mindark focusing on the game more. There is old items and systems that need to get rid of, that will hurt some but in longterm that will be good.
 
you have summarized the financial point of the thing and you have it very well written. thank you for this analysis.
it does not do very well with the sale of CP which is equivalent to some of your comments.:nutkick:

I do not like this type of analysis for a game, but in recent years, it really reflects what it has become this "game" now, it's rather trader game or money laundering.
 
A lot to read, and I'm not even sure why you are writing these essays, but still interesting.

One point about salary data; personnel costs are not pure salary. I'm not positive about Sweden, but at least for most US companies each employee costs usually around 1.5x their base salary due to taxes and benefits - it's probably higher in a socialist country. This would put the average MA salary at around the 45-50k USD mark, given even distribution, which of course it is not. Considering upper management will earn quite a bit more than the rest of the staff, it's safe to assume MA is paying under market rate for given positions.

Unfortunately there's no Glassdoor data to show, other than this kind of hilarious employee review:

Pros

There are no reasons to work at mindark, worst place ever.

Cons

Management is a joke, if they cared less about employees, they'd break records.
 
Well things have moved on. This FEN event and MM has been a great success I think, and for FEN items that are ‘priced right’ players have deposited to buy them and tier them….and most importantly use them. Based upon what I’ve seen, activity on Caly has been pretty upbeat.

Sometimes I get a little frustrated at items being unrealistically priced, but it will settles down in the end. I just wish some people would recognise the market and dynamics have changed. It’s not 2006 anymore for pricing stuff.

Anyway pull out your credit card and go shoot some stuff. I’m not saying it’s all roses, personally I think the Compet situation and Ark Moon is pretty sad, but I’ve got a spring in my step at the moment…..feeling positive for 2019.

Rick

I agree that things are looking up based on improvements to events and CLD payouts during them. In a couple of places I've found myself asking "What's happening here and what is the activity driver behind it?". I'm assuming some people have found a secret or two, but I've not been clever enough (or done the right activity) to have worked it out yet.

"Trust" does not appear to have reached Ark Moon yet, or 'clever activities' have not been enabled there yet. Personally, I was very turned off by running around stupid building layouts which appeared to be simply cosmetic but gave me no impression of a building designed for anything. But I digress - more and more it is deed payouts which can show if things are succeeding in turnover or not, and we saw that extremely clearly before ComPet collapsed.

Deed prices are fairly stable, so I assume trust is fine for most people too! I will await the CP deeds with interest.
 
Well written thread, with trust it seems to go in the right way , seems , maybe they focus Moreno. Game and stop doing stupid investments, second... I don’t know I need to say I agree with Divinity , you cannot compare it with a bank. For many reasons.
What needs MA to do more ? To be trustworthy, I can say I have a lack of trust even if I deposit, and I’m not like spacejanitor waiting a ATH to say this game is for real. Lol , I know it’s for real , but... it’s a bit in the middle that i don’t want to talk about it or share it .
 
i did not really understand, was it a good or a bad post? does he really know how to read financial sheet? cuz i dont, i just deposit and kill and then withdraw, so far it worked......
As my expierience says, and believe me i can say, players scares me more than mindark, and you posting that are basically convincing me to do the opposite of what u intend me to. lovely paranoia
 
I agree that things are looking up based on improvements to events and CLD payouts during them. In a couple of places I've found myself asking "What's happening here and what is the activity driver behind it?". I'm assuming some people have found a secret or two, but I've not been clever enough (or done the right activity) to have worked it out yet.

"Trust" does not appear to have reached Ark Moon yet, or 'clever activities' have not been enabled there yet. Personally, I was very turned off by running around stupid building layouts which appeared to be simply cosmetic but gave me no impression of a building designed for anything. But I digress - more and more it is deed payouts which can show if things are succeeding in turnover or not, and we saw that extremely clearly before ComPet collapsed.

Deed prices are fairly stable, so I assume trust is fine for most people too! I will await the CP deeds with interest.

I feel a definitive plan is place that in management talk is gradually "positioning" the game in staged adjustment.
In other words I actually believe this time MA have a workable plan, and are carefully phasing this in and monitoring changes.

First came loot 2 which is supposed to prolong our peds hunting etc, now come the items to back up loot 2 to improve your longevity even more.

What's quite interesting I think, is that MA have recognised that the game can't continue in the same way it did before, where everyone constantly struggles while a small group of the player base increasingly get stronger and stronger at the top. It worked while there were tons of middle players, but the game wasn't attracting enough numbers to keep that pyramid style sustainable.

Actually I'm quite surprised. When the CEO said he spoke to his staff and "listened" and is now taking action, I thought yeah yeah yeah more fluff and whistles......but I now believe he's speaking the truth.

This is why we now have exceptional efficiency weapons at lower levels. Quite a shock to all I'd imagine, but guess what...I truly love it. Because on a personal level all of us have got a chance to survive "so we want to be here".

I think there's going to be tones of new stuff coming with lovely stats at all levels. This is why I think 15K - 20K is enough to buy items (if not lucky enough to loot it), because I'd imagine there's going to be lot more items coming that make us excited again

To be honest I'd rather have lots of wonderful things to play with, than care if its worth 50K ped. Lets play the damn game …..smiles.


Cool ehhh.


Rick
 
This thread contains some references to my previous thread: To click or not to click? The veteran new player experience.
https://www.planetcalypsoforum.com/forums/showthread.php?307899-To-click-or-not-to-click-The-veteran-new-player-experience


Unpolished diamond, polished dice - Trust


It will not be a serious exaggeration to say that first-world modern economy model is based on trust. Educated societies are fully aware that money they deposited in the bank are not fully covered, money flows, and no bank can guarantee withdrawal of all the financial resources for all participants at the same time. Bank just simply does not have this money. The exchange ratio between gold and US dollar (so-called Gold Standard) is gone since its abandonment in 1933. That is why so-called “run on banks” is the biggest nightmare in the world of banking – best latest example could be 2012 Cyprus banking crisis. Lack of trust can ruin every economy. Nowadays, the paper you carry in your wallet represents the value of items that can be bought on the market. Technically, it is nothing more than a piece of paper. What makes it a legal tender is you trust. Trust backed by central banks and governments – institutions that supposedly guarantee that piece of papers and chipped plastic in your wallet have real value and can be exchanged to some goods.....


Nice write up.
[Just sit back and watch who is the defenders of MA / EU]
To be fair, I would not want to make too much stories-link or assumptions.
 
Another thing I find particularly problematic is the fact that the OP is suggesting that the game's viability is based on player trust, then proceeds to undermine that trust by writing a somewhat alarmist, negatively biased article, as if purposefully trying to cause a 'run on the banks'.

Again, who is the OP and why is he doing this? We need more information. Is he a competitor to MA? A grumpy player MA banned? Who knows.



Well, let's look at this way... it has been same old players talking/defending with positive comments on MA/EU prospects. Definitely, you can see who are them... and they are players playing the game too.

Haven't you have some comment on that? Do you see what I see? I am sure, it's nothing special but commonly normally trust has always being an issue.

Who cares about competitors or enemies of MA.....
 
i did not really understand, was it a good or a bad post? does he really know how to read financial sheet? cuz i dont, i just deposit and kill and then withdraw, so far it worked......
As my expierience says, and believe me i can say, players scares me more than mindark, and you posting that are basically convincing me to do the opposite of what u intend me to. lovely paranoia


Well, everyone has their purpose here.

Like one says, MA just provide a sandbox, and players decide how to play the game.

BUT when it comes to financial statements is all about financial stability of the MA/EU.
I don't feel the OP wanted to hurt MA/EU badly instead maybe... he/she is just boring or wanted to highlight to the readers - the risk you are taking while investing in MA/EU.
 
The fanboizism is strong with this one...
 
Aside from jokes in this one topic the OP appears to be a newbie and has made several pro-MA mistakes in their first topic. This topic also gives MA the benefit of the doubt and reads like they are hoping MA will change.
 
Very well written! (Again)... :)

You must spread some Reputation around before giving it to boring_player again.
 
Thank you for all the answers, I believe that every input you make can benefit MindArk and the player community.

Before I write anything further let me make a clear statement:

My article is a theory – my goal was to write unbiased text which will be informative and will benefit both MindArk (a little wake-up call) and players (raise of awareness about MA finance). I do not want you to quit or join the game. I do not want to take away your pleasure you have while playing the game. I am a liberal – I believe you should do whatever you want to do and spend your money in whatever way you like as long as it does not hurt innocent people. I do not judge anyone. Particular reason why I back this project and write my opinions is its uniqueness – as someone stated before, this game is unpolished diamond that could shine. But there is plenty of work to do – first you must recognize the issues. I believe my both articles do that.

The merits

As I stated in my previous article, I found many of EU players mature and friendly (it does not happen very often nowadays in MMO's) but this time I felt that my presence on this forum made several people unconformable. I am wide aware that we are talking real money here so some emotions are also included, but when you suggest that I must be some kind of old pissed-off player, MindArk competitor and I may have some stake in writing such articles, I feel obligated to post some further explanations, maybe even I should introduce myself second time :)

Once again, I consider myself a MMO veteran, I played and experienced wide variety of games throughout last 20 years. What I haven't mentioned before is that I do financial analysis/accounting professionally in my day-to-day job. That is why when I saw that MindArk issues Financial Statements I couldn't resist to check it and post my observations. I've seen hundreds similar statements in my career, this one is nothing special to be honest except one thing - EU platform itself. I have never audited any company that is running virtual world with real cash economy before. Maybe because MindArk is simply the only company in the world with this business profile. Simply, my natural financial curiosity won and I had to check it. I like to develop my skills and MindArk is a unique business case-study. After brief analysis I noticed, that in general, this company has been balancing on the edge of bankruptcy for a couple of years now. This is how the idea was born to write second article.

I still fell urge to refer to some of your answers:

Jehereg says:

1) None of the material in this article is new nor interesting. In fact it is all fairly obvious, and has been posted about before.
2) Who is the original poster/author? What stake does he have in this?
3) Who is the original poster and what is his motivation?

1 – of course it is nothing new, financial statement was issued in September 2018 – players truly interested in Mindark financial outcome probably already know that their financial situation is bad (especially in the light of recent Deeptoken failure – in the statement (Note 18) they considered Deeptoken to be important source of growth). I just did some analysis and posted it using simple non-financial language to make everyone able to understand it (in places where I was using some financial terms I was also posting simple explanations)

2 & 3 – Well, this I find truly amusing, such suspiciousness were always making me smile. You would be probably disappointed if told you that I registered my account in the game recently and deposited in total 100$ and I am not a special-super Mossad/FBI agent with a goal of reclaiming all the MindArk shares in order to sell it to Electronic Arts or Blizzard. I am currently level 15 laser sniper noob with PED account balance oscillating around 1,5k PED now. My motivation was to make MindArk more aware and “wake-them-up” a little bit so they could get their company and project back on track.

Jehereg also says:

Again, who is the OP and why is he doing this? We need more information. Is he a competitor to MA? Is he a competitor to MA? A grumpy player MA banned? Who knows.

Again, no I am not a competitor nor a grumpy player. Although, I will not fulfill your need of knowing me better because I do not reveal my personal data to strangers as I value my privacy. I already stated what my professional area is – corporate politics also prevent me from revealing more data.

But, as OP would know if they followed the returns on CLDs, player cycle is up in 2018, reflected by CLD returns. But OP doesn't seem to include any projected performance for 2018.

Well, this is not unfortunately the case Jehereg. I do not care about your deeds returns – that is not the subject of my article. In fact, you could have even 10k % ROI on them, you could double your PED balance daily and hit 10 figures ATH tomorrow. It is all meaningless as long as MindArk don’t have your money and what is worse don’t have any source of new income because New Player Experience system fails and new players do not deposit enough (they admit it directly in their statement) and Deeptoken sales failed (recently announced - again, check the Note 18 of their Financial Statement - they considered this project to be a source of growth).

In April 2018, MindArk started to undertake a token sale (ICO), which will raise capital to fund and
operationalize the next stages of the company’s growth.

Jehereg, you are also unfortunately wrong about Loot 2.0 too:

2017 was the year that MA switched from Loot 1.0 to Loot 2.0. So I'm not surprised revenues decreased that year, as there were many disgruntled players.

Here are MindArk's words (Note 18 of Financial Statement - paragraph 2):

By 2018, we can see that the previously mentioned Loot 2.0 in addition to having significantly
improved repayment for the large amount of players also has increased the company's revenue as
more users spend more time in Entropia when the loot composition is considered to work much
better
and more fairly.

Loot 2.0 was a simple idea - better return equals better player experience. This will encourage players to spend more time in game, hunt bigger mobs, gear up - simply, spend more money. And players did, but still despite Loot 2.0, revenues dropped significantly by 10% and did not reach MindArks development goals.

Business model, von Bismarck, source of revenues

There is no new source of financing for MindArk for now besides their Webshop. You can make billions of PEDs on your in-game activities but as long as the sales are dropping, new players are not depositing enough, growth and money acquisition plans fail the von Bismarck model I described will not work.
Same as pensions invented by von Bismarck, new generations work and pay taxes so governments can pay current old generation pensions.

Since MA have very little money in bank account - money inflow from new players and current sales are crucial and very much needed to cover the withdrawals of old players - that is my guess.

If they don't have enough money it means that if you request withdrawal, you must simply wait for MindArk to sell some of their products first so they can transfer new players money to your pocket. How long will it take to withdraw? Depends on sales I guess and on the amount of withdrawal. Week, month, maybe even more than one financial year.

I just want you all to be aware that every gain in the worth of your account is a serious liability to Mindark. Liability they currently are not able to re-pay. The player debt (value of players account described by MA) is more than 10,5 million USD while their bank account has less than 1 million USD.

I do not know why you suggest that my opinion is biased or negative. All I do is simple analysis of MindArk’s financial statement and their business model – that’s all. I do not disagree that some recent changes in game were good for players, I even said that I very much like the way mining is designed. It’s not my fault that their corporate bank account is almost dry, their player debt is 10 times bigger than the cash in bank and that short-term liabilities doubled the size of short-term receivables. If someone cannot comprehend those simple facts then there is nothing more I can do. I believe in the power of numbers. Numbers don’t lie.

Some other comments

Divinity says:

Unfair Comparing EU to a Bank - Which Bank IRL only says that your last 6 months of deposit are covered? There are plenty other facts which very much make EU completely different then a bank and personally i think this is an unwarranted comparison.

You are right, EU is not a bank and never will be. But I did not compare EU to a Bank in straight line. I just used the example of how the bank deposits look to a bank form accounting perspective to make easier to understand what MindArk Player Debt is. Technically you might consider it MA asset (as in a banking case) but it’s quite different. From business perspective, both, bank depos and MA player debt are liabilities.

Messi91 says:

So the OP is telling us he is a new player - ok
Then this post - ok I combine the two and its a huge discrepance at least in my eyes.When most new players 'eat dirt" and hunt kerbs for 7 years without progress we get this elaborate lets say writing.

Well, don’t I have right to comment on the product I just bought? Last year I spent my holidays in Greece and all was ok besides breakfasts. The hotel was serving it late and food was cold. Should I eat dirt and go to Greece and spend there next 7 holidays seasons to be able to evaluate what I experienced? Messi, first impressions are usually right – you can make good first impression only once. Players and MA must understand it. Make a good first impression on a new player and he will stay and pay (simple marketing/customer strategy). Make a bad one – well, you will have what I described in my previous article “to click or not to click? MMO veteran new player experience”

Regards,
Boring_player

Ps.
Soon I will write also why I mentioned the salaries and personnel spending in the article. It’s about Swedish labour law case. I hope it also will be informative and may animate some good discussion.
 
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Correction.
Loot 2,0 was to prevent a further drain of the system due to guaranteed tt+ returns.
 
Thank you for all the answers, I believe that every input you make can benefit MindArk and the player community.

... first impressions are usually right – you can make good first impression only once. Players and MA must understand it. Make a good first impression on a new player and he will stay and pay (simple marketing/customer strategy). Make a bad one – well you will have what I described in my previous article “to click or not to click? MMO veteran new player experience”

For years I have considered EU to be similar to an uncut diamond, and with no other company I know of risking a RCE in a virtual world and a straight tie-in to the dollar.
And for years MA has seemed to invest our deposits unwisely in all sorts of areas, from a castle to ComPet to deeptokens to areas of the actual EU game that players never asked for or were good ideas but poorly implemented and forgotten about by most.
It is this that I see as the problem - no growth resulting from how 'our' peds have been used by MA.

However, it is still an entertainment platform which has income from people simply playing the game at levels they find acceptable. I wish it were more, though.
 
Divinity says:

You are right, EU is not a bank and never will be. But I did not compare EU to a Bank in straight line. I just used the example of how the bank deposits look to a bank form accounting perspective to make easier to understand what MindArk Player Debt is. Technically you might consider it MA asset (as in a banking case) but it’s quite different. From business perspective, both, bank depos and MA player debt are liabilities.

I will just respond to the part addressed to me. Both are liabilities but the risk factor is different. Banking for example in India has government regulations such has SLR ( Statutory Liquidity Ratio) assigned by the government making it compulsory for the bank to maintain. If i am not mistaken US has something similar called LCR ( Liquidity Coverage Ratio). While you suggest both being liabilities , yes both are but the way it is managed and the risk associated with the two liabilities is different.
 
I will just respond to the part addressed to me. Both are liabilities but the risk factor is different. Banking for example in India has government regulations such has SLR ( Statutory Liquidity Ratio) assigned by the government making it compulsory for the bank to maintain. If i am not mistaken US has something similar called LCR ( Liquidity Coverage Ratio). While you suggest both being liabilities , yes both are but the way it is managed and the risk associated with the two liabilities is different.

Oh, I know some about India's banking system I guess , I was working for couple of weeks in Mumbai when at the same moment suddenly Modi announced that most of the money I just witdrawn from ATM machine are considered useless. I miss my 2k old banknotes rupees till now :) Good thing my Indian friends were able to help me at that time. :)

But straight to the topic - the comparison is very noncommittal, I just wanted to highlight that 10,5 million USD is a liability, nothing more. Also, what do you mean by: Which Bank IRL only says that your last 6 months of deposit are covered?

I haven't yet read thoroughly MindArk terms of use and EULA but maybe I will, is it connected with deposits?

Regards,
Boring_player
 
Oh, I know some about India's banking system I guess , I was working for couple of weeks in Mumbai when at the same moment suddenly Modi announced that most of the money I just witdrawn from ATM machine are considered useless. I miss my 2k old banknotes rupees till now :) Good thing my Indian friends were able to help me at that time. :)

But straight to the topic - the comparison is very noncommittal, I just wanted to highlight that 10,5 million USD is a liability, nothing more. Also, what do you mean by: Which Bank IRL only says that your last 6 months of deposit are covered?

I haven't yet read thoroughly MindArk terms of use and EULA but maybe I will, is it connected with deposits?

Regards,
Boring_player

Flashback from the past. I still have a few of those 2k's around ( mostly cause i came to see those after the conversion period was over). :)

FYI

MINDARK'S LIABILITY TOWARDS YOU SHALL, IF ACKNOWLEDGED, IN EACH INCIDENCE BE LIMITED TO NO MORE THAN THE TOTAL AMOUNT TRANSFERRED INTO THE INVOLVED ACCOUNT BY SAID PARTICIPANT UNDER SIX MONTHS PERIOD PRIOR TO THE INCIDENT.
 
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